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How OEMs drive business continuity with services-oriented models

Sept. 1, 2020

The pandemic is a turning point for industry.

Supply chains need to be dynamic to respond to changes in customer demand. We all know this. But manufacturing has completely transformed in recent months; since the COVID-19 pandemic began, many manufacturers have been forced to scale down or focus on fewer product categories, while others have needed to scale up to meet increased demand. At the same time, manufacturers are expected to maintain quality and abide by new health protocols, which puts a significant strain on industrial original equipment manufacturers (OEMs) working to support customers not prepared to handle such fluctuation.

Schneider Electric’s Simone Gianotti

Decades ago, the manufacturing industry faced the challenges of accelerated speeds of business and the proliferation of new digitized technologies. This helped OEMs compete during times of disruption. For machine-builders, technology innovations delivered clear advantages by enhancing the visibility into installed-base machine performance information. Still, while such capabilities enabled many efficiencies and growth opportunities, OEM customers have been slow to take full advantage of digital solutions…until now.

A turning point for the industry

Hardware (think sensors and push buttons) was traditionally the core of an OEM’s equipment, but as these tools became more of a commodity, machine-builders worked tirelessly to keep up with the constant influx of new digital technologies. As a result, OEMs have significantly evolved in recent years from a hardware-first approach to a software-focused one that  drives efficiencies, lowers equipment costs, and enables them to offer customers more in terms of add-ons or end user support services.

Not only do these tools provide access to machine-performance data, but modern cloud-based solutions make it easy for OEMs to get started in the process of smart remote monitoring.

Although OEMs have had the tools to provide digitally enabled support services for some time now—such as remote assistance via cloud services, web visualization and more—end users have been resistant to fully embrace the benefits due to data-ownership conflicts and other cybersecurity concerns.

However, the state of today’s market put the manufacturing industry up to the test, assessing its ability to quickly adjust to new needs while maintaining growth with less capacity. As global mobility remains limited, customers are quickly embracing the need for cloud-based tools to enable remote work and maintain overall business continuity during times of turmoil.

Enter machine-plus-services

Demand for digital services—what an OEM can provide to a customer after they have sold the piece of equipment—has increased significantly since the start of the pandemic. For example, customers are realizing it’s much more efficient from both a time and cost perspective to grant their OEM direct access to monitor and manage their machine from a remote location.

Enabled by digitization at various levels, machine builders are starting to more broadly adopt a services-oriented model. First, machine builders acquire a new awareness of how their machines are used in the field through advanced data collection, which is helpful when addressing production-quality issues and improving machine performance. Second, OEMs can provide better service to end users and minimize the duration of machine downtime with early tracking and analysis tools. Machine-builders can easily detect performance anomalies and take preventative measures to avoid having to manage fixes in emergency situations.

The way manufacturing machines are monitored and serviced is costly and time consuming. In the standard process, machine-builders lack quick and easy access to end user machine-location and operations information. Simultaneously, end user line managers struggle with tracking the history of the many machines that fall under their watch. When parts need replacing or fixing, production is interrupted, and downtime is prolonged until a maintenance technician can arrive onsite. In addition, technicians tasked with fixing machines often spend most of their time attempting to locate different sets of documentation in order to begin productive work.

Digital technologies can now directly address these challenges by providing new ways of gathering, centralizing and displaying machine-generated data. It is now possible to remotely observe and help fix machines in the field while reducing support costs by 50%. Generally, similar tools can help OEMs build on new service opportunities by tracking and storing documentation (from bill of materials, to localization and maintenance logs), remotely monitoring performance data, and accelerating machine repairs via mobile services that facilitate maintenance operations at end-user sites through augmented reality.

Today’s turbulent environment was unforeseen. It affected OEMs’ ability to service customers in conventional ways. The capabilities offered by digital technology, fueled by advanced connectivity, have opened the door to growing end-user support-services revenues for OEMs while strengthening resilience and increasing productivity for their customers. For manufacturing facilities to adapt to unexpected volatility in our current state, as well as in the future, modernizing operations in this manner is key.

Simone Gianotti is Schneider Electric’s EcoStruxure industry-deployment leader